Much of Asia is publishing its best economic growth numbers since the technology bubble burst, but analysts have a feeling the peak may have passed.
At the turn of the year, Asia was rebounding strongly from the Sars outbreak, helped by a booming Chinese economy, growth in the United States and Japan, and a policy of keeping currencies weak to generate demand for the region's exports.
Obstacles have since appeared: possible rate rises in the United States, surging oil prices, squeezed margins due to a lack of pricing power, and a government plan to slow the Chinese economy.
"In terms of momentum, it's headed south for most of the region," said Sailesh Jha, CSFB's senior regional economist.
"The global trade cycle is likely to peak in the second half of the year so by default then the momentum in terms of growth across the board in Asia starts to decelerate."
Still, the outlook is not desperate. Asia will be slowing from a rapid pace to show still solid growth.
"You are certainly in a weaker growth environment in 2004, but not catastrophic," Jha said, adding some market pessimism was to be expected after a sustained period of good economic news.
"At the margins, what are the improvements on the macro front that you are going to be seeing in the next six to 12 months? - not much," he said.
Leading the way in the first quarter, Japanese growth was a stronger-than-expected 1.4 percent, while China's economic output was up almost 10 percent on a year earlier.
In the year through the first quarter, Singapore, Hong Kong, Taiwan and Malaysia all posted their fastest growth rates in years.
But there are signs of moderation already.
Hong Kong's 6.8 percent growth in the year through the first quarter was its fastest since 2000, but quarterly growth slowed. First quarter growth also came in under expectations in South Korea.
On Monday Thailand reported quarterly growth of 0.8 percent, half the median forecast of economists. Growth from a year earlier slowed to 6.5 percent in the first quarter from 7.8 percent at the end of 2003.
The major questions for Asia include how high oil prices will go, how much China will slow, and how higher US interest rates will affect demand for the region's exports.
Asia relies heavily on imported oil. Prices above $40 per barrel have raised concerns, although analysts point out that, after adjusting for general price inflation, oil is far from historic highs.
Goldman Sachs economist Kim Sun-Bae said his bullish outlook for Asian growth would have to be reconsidered if oil remained above $40 per barrel, but it would not be a marked shift.
"Barring further substantial upward spikes, however, we do not think the current oil price level is sufficient to derail the nascent domestic demand recovery," he wrote in a report.
"Oil at $50 a barrel on a prolonged basis would be a big deal; we estimate it would erase anywhere between two to five percentage points from baseline gross domestic product in non-Japan Asia."
That is not a scenario that many analysts expect.
Indeed, if the other worries about Asia's outlook come true - slower growth in the United States and China, the world's largest oil consumers - then oil prices would probably fall from current levels.
Further, analysts class the expected US rate rises as unwinding some of a very loose monetary policy designed to head off deflation. US rates would therefore not be moving to a restrictive setting but rather back towards neutral, still supporting growth.
And while China has become increasingly important to Asian economic activity, the region should be able to withstand a slowdown, especially as market opinion favours Beijing achieving a soft landing for the economy.
"I think the impact of China can and has been exaggerated," UBS global economist Paul Donovan said.
"Of course we are looking for an impact. But for a lot of the Asian region a slowdown in China's investment cycle isn't a disaster," he said.
"For a lot of the Asian region, what they care about is final consumer demand out of the United States, and the exports to China are simply components which then go on to there."
In a report in April, the World Bank noted that about half of China's imports were used to feed into Chinese exports, about 55 percent of which went to the United States, Europe and Japan.
"Fortunately the fact that the developed countries are in recovery should help cushion the shock to regional exports," the report said.
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